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A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover.. In the field of mergers and acquisitions, shareholder rights plans were devised in the early 1980s to prevent takeover bids by limiting a shareholder's right to negotiate a price for the sale of shares directly.
By the end of the decade, management of many large publicly traded corporations reacted negatively to the threat of potential hostile takeover or corporate raid and pursued drastic defensive measures including poison pills, golden parachutes and increasing debt levels on the company's balance sheet. Finally, in the 1990s the overall price of ...
Hostile takeovers can cause a lot of disruption for the target company and its employees. It can lead to massive layoffs, as the acquirer looks to cut costs and boost profitability.
Poison pill may refer to: Suicide pill, a physical pill for suicide by poison; Poison pill amendment or wrecking amendment, an addition to a legislative bill that renders it ineffective; Shareholder rights plan, also called a poison pill, a subclass of anti-takeover provisions that dilutes the attacker's power
On Monday, Hertz Global Holdings publicly announced the implementation of a "shareholders rights plan." Also known as the "poison pill defense," the plan, which received the approval of the ...
Riot disclosed a 12% stake in Bitfarms in June, and the latter rebuffed its $950 million offer, citing the bid undervalued the company. Bitfarms adopted a "poison pill" to fend off a hostile takeover.
Unitrin, Inc. v. American General Corp., 651 A.2d 1361 (Del. 1995) is the leading case on a board of directors' ability to use defensive measures, such as poison pills or buybacks, to prevent a hostile takeover.
The move comes days after Riot Platforms disclosed it had built a 12% stake in Bitfarms as it pursues a takeover attempt. Riot had offered to buy Bitfarms for about $950 million last month.